Jordy is the CEO of a scaffolding construction company. He is about to begin preparing the budget
Question:
Jordy is the CEO of a scaffolding construction company. He is about to begin preparing the budget for the coming financial year for the entire organisation. Last year he was disappointed by the animosity he received from his divisional managers. They were not happy with their individual budgeted forecasts. He knew the targets were hard to achieve, but why make them too easy? ‘I am not giving away bonuses for nothing,’ he thought. Jordy had always prepared the budget himself. He believes that no-one knows the company better that he does. The company was established by Jordy’s father more than 30 years ago and Jordy has worked for the company since he left high school.
Required
Advise Jordy on the key requirements for successful budgeting. What changes to the way budgets are currently set would you recommend?
Step by Step Answer:
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey